The market was primarily buoyed by a strong rally in auto and metal stocks as investors continued to price in the positive impact of recent GST reforms. Notable gainers included Tata Motors and Mahindra & Mahindra, while IT and FMCG sectors faced selling pressure, capping the broader market’s upside.
The positive sentiment was also supported by global cues following a soft US jobs report that raised expectations of a Federal Reserve rate cut. However, persistent foreign institutional investor (FII) outflows and profit-booking at higher levels prevented a more significant breakout.
Two stock recommendations by MarketSmith India for 9 SeptemberBuy: Swaraj Engines Ltd (current price: ₹4,408)Why it’s recommended: High profitability and financial strength, strategic OEM partner and market position, operational efficiency and scalable model, favourable agrarian demand tailwinds.Key metrics: P/E: 29.46; 52-week high: ₹4,720; volume: ₹35.55 croreTechnical analysis: Reclaimed its 100-DMARisk factors: Volatility linked to monsoon & rural economy, limited operating leverage flexibility, client concentration risk, intense competitionBuy: ₹4,408-4,465Target price: ₹5,050 in two to three monthsStop loss: ₹4,090Buy: Sarda Energy & Minerals Limited (current price: ₹576)Why it’s recommended: Strong vertical integration across mining, metals & power, record profitability margins, and strong earnings growthKey metrics: P/E: 22.05; 52-week high: ₹620; volume: ₹61.88 croreTechnical analysis: 21-DMA retakeRisk factors: Rising debt & interest cost pressures, cyclicality in steel & allied businessesBuy at: ₹570-580Target price: ₹670 in two to three monthsStop loss: ₹530
How the Nifty 50 performed on 8 September
Sectoral breadth was healthy. Auto and metals led the advance, buoyed by GST reforms and robust demand expectations, including positive commentary on China’s steel reforms. Tata Motors jumped around 3%, while steel stocks such as JSW Steel, Tata Steel, and SAIL also gained around 3% each following upgrades from brokerage houses.
Price action reflected a rejection near the upper trendline of a descending channel, with the index unable to close above the critical confluence of the 50-day (24,950) and 100-day (24,800) simple moving averages, both of which are currently flattening—a sign of neutral short-term momentum.
Momentum indicators are showing early signs of recovery but remain inconclusive. The RSI (14) is currently at 50, struggling to break out of a downward-sloping channel, suggesting that bulls lack strong conviction unless a move above 52 materializes. Meanwhile, the MACD has turned mildly positive with a recent bullish crossover, but the histogram’s shallow incline indicates limited upward momentum at this stage.
According to O’Neil’s methodology of market direction, the market status has been downgraded to an ‘uptrend under pressure” as Nifty breached its 50-DMA and the distribution day count is at three.
Nifty 50 closed flat after a volatile session, continuing to hover around its 100-DMA but once again failing to reclaim it. This reaffirmed 24,700–24,800 as a key resistance zone in the near term. A decisive breakout above this range is be required to unlock further upside toward 25,000. On the downside, immediate support is seen at 24,650–24,600, with a breach below this likely to accelerate declines toward 24,500–24,400. Overall the index remains range-bound, with these critical levels on either side expected to dictate short-term direction.
How did Nifty Bank perform?
Nifty Bank had a a gap-up opening on Monday, signaling early strength in the banking space. Despite bouts of volatility, the index managed to hold on to its gains and remained in positive territory through the session.
Price action reflected resilience among frontline banking names, with buying interest re-emerging on declines. Notably, the index formed a bullish candle on the daily chart with a higher high–higher low structure and successfully retested its 21-EMA, underscoring short-term support at that level. The index opened at 54,215.40, touched an intraday high of 54,518.70 and a low of 54,067.15, before settling at 54,186.90.
Momentum indicators present a mixed outlook. The RSI continues to move sideways and is currently positioned at 39, highlighting limited scope for an immediate recovery. Meanwhile, the MACD remains below the central line with a negative crossover, pointing to persistent bearish undertones. As per O’Neil’s methodology of market direction, Bank Nifty remains classified as an ‘uptrend under pressure.”
Against this backdrop, investors are advised to focus on fundamentally strong and technically resilient stocks, maintain strict risk management, and allocate capital selectively to high-conviction opportunities.
From a technical standpoint, the index is facing resistance near 54,500, with the next major hurdle around 55,300. A sustained close above this zone would be crucial to validate a meaningful recovery. A decisive breakout above 55,000 could reinforce bullish momentum and open the way for an extended upmove. On the downside, immediate support lies at 53,500–53,600, and a breach below this band could invite further selling of nearly 2%, increasing the probability the index retesting its 200-DMA.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.